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United Continental Holdings Inc. reached a breakthrough in its negotiations with labor unions after a group backed a tentative deal to bring 25,000 flight attendants under a single labor contract for the first time since the merger that created the airline almost six years ago.
“We have a tentative agreement,” the joint master executive council of the Association of Flight Attendants said in a statement. “We stand behind the tentative agreement and unanimously approved submitting it to members for ratification.”
A unified labor contract with flight attendants would address one of the most glaring failures since the 2010 merger of United’s parent company with Continental Airlines. Attendants from the two airlines had separate contracts and couldn’t even work on the same aircraft, which created problems in scheduling flight crews.
The support to the proposed deal, announced Friday, marks another step forward for Chief Executive Officer Oscar Munoz and his efforts to smooth relations with United’s workforce. Since the merger, United’s attendants have remained in a United camp, a Continental camp and a third unit for Continental Micronesia workers, marked by frequent clashes with management and other employee groups.
Balloting will start after members of the association have access to the full tentative agreement, according to the statement.
United’s pilots signed a two-year contract extension in January, and the carrier’s dispatchers approved a labor deal in March. The airline has yet to come to terms with its roughly 8,900 mechanics.
Munoz must juggle higher labor costs approved under the new contracts with his plan to improve United’s profit margin. He recently announced a plan to find $3.1 billion in savings and extra revenue by 2018.
Because United has struggled with labor relations since the merger, the advantages of reaching an accord with flight attendants will help offset any additional costs, said Joseph DeNardi, an analyst at Stifel Financial Corp.
©2016 Bloomberg L.P.
This article was written by Michael Sasso and Crystal Tsz Ching Tse from Bloomberg and was legally licensed through the NewsCred publisher network.